California enacts $52 billion fuel tax hike for road, bridge repairs

Reuters Staff

2 Min Read

LOS ANGELES, April 28 (Reuters) - California Governor Jerry Brown signed into law on Friday a bill to raise gasoline taxes and other transportation-related fees for the first time in decades in an ambitious $52 billion plan to repair the state’s long-neglected roads and bridges.

The measure, increasing excise taxes on gasoline by 12 cents per gallon, from the current rate of $0.28 a gallon, and on diesel fuel by 20 cents per gallon over the next 10 years, goes into effect in November.

It cleared the state legislature three weeks ago, on the strength of a two-thirds super-majority the Democrats wield in both houses that allows them to pass new taxes with little or no Republican support.

Republicans condemned the increases, saying the state’s transportation taxes and fees are already among the highest in the nation. They call the newly enacted measure the largest gasoline tax in California’s history.

The average motorist in California, a state renowned for its car culture, will see transportation costs rise by about $10 a month under the measure, according to Brown, a Democrat who has governed largely as a fiscal moderate.

He has refused to back any transportation overall plans that involved borrowing money.

Supporters say the measure is needed to address a mounting backlog of crumbling infrastructure projects, including more than 500 bridges statewide requiring major repair, most of them considered structurally deficient.

The fuel tax increases, together with higher vehicle licensing fees and a new $100 annual fee on owners of electric-only vehicles, would raise $5.2 billion a year, all earmarked for road, highway and bridge repairs and anti-congestion projects.

To address concerns that those revenues might end up diverted elsewhere in the budget, the bill calls for a state constitutional amendment, to be placed on the June 2018 ballot, that would prohibit use of the funds for anything but transportation. (Reporting by Steve Gorman; Editing by Sandra Maler)